Ciccio v. SmileDirectClub, LLC

Docket: 20-5833 

Opinion Date: June 25, 2021

Judge: McKEAGUE 

Areas of Law: Arbitration & Mediation

SmileDirect sells orthodontic implements online as an alternative to traditional orthodontists. Plaintiffs sued SmileDirect, alleging false advertising. SmileDirect and its customers had an arbitration agreement that excepted claims within the jurisdiction of Small Claims Court. The district court concluded that whether the claims fell within that exception was a gateway question of arbitrability and that the parties agreed to arbitrate such gateway questions. The consumer plaintiffs voluntarily dismissed their claims. One consumer plaintiff, Johnson filed a demand for class-wide arbitration with the American Arbitration Association (AAA). An AAA administrator stated that AAA’s Healthcare Due Process Protocol and Healthcare Policy Statement applied, which require healthcare providers and their patients to sign an arbitration agreement after a dispute arises in certain cases unless a court order has compelled arbitration. Johnson declined to sign the post-dispute agreement and moved to rejoin this case. The district court held that Johnson satisfied his obligations under the arbitration agreement, concluding that the arbitration agreement did not cover the dispute. The Sixth Circuit reversed. Whether an arbitration agreement covers a dispute is a gateway question of arbitrability, and here the parties delegated such questions to an arbitrator. Under the agreement and the incorporated AAA rules, it was improper for an administrator to effectively answer that gateway question or to overlook it altogether by binding the parties to AAA’s views of sound policy.

Perez v. Sturgis Public Schools

Docket: 20-1076 

Opinion Date: June 25, 2021

Judge: Thapar 

Areas of Law: Civil Procedure, Education Law

When Perez (now 23) was nine, he emigrated from Mexico and started school in the Sturgis. Perez is deaf; the school assigned him a classroom aide who was not trained to work with deaf students and did not know sign language. Perez nonetheless appeared to progress academically. He was on the Honor Roll every semester. Months before graduation, the school informed the family that Perez did not qualify for a diploma—he was eligible for only a “certificate of completion.” Perez filed a complaint with the Michigan Department of Education, citing the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. 1412, the Americans with Disabilities Act (ADA), the Rehabilitation Act, and Michigan disabilities laws. The ALJ dismissed the ADA and Rehabilitation Act claims for lack of jurisdiction. Before a hearing on the IDEA claim, the parties settled. The school agreed to pay for Perez to attend the Michigan School for the Deaf, for any “post-secondary compensatory education,” for sign language instruction, and for the family’s attorney’s fees. Months later, Perez sued Sturgis Public Schools, with one ADA claim and one claim under Michigan law, alleging that the school discriminated against him by not providing the resources necessary for him to fully participate in class. The Sixth Circuit affirmed the dismissal of the claims. Under the IDEA, the decision to settle means that Perez is barred from bringing a similar case against the school in court—even under a different federal law.

Barger v. United Brotherhood of Carpenters & Joiners of America

Docket: 19-3852 

Opinion Date: June 25, 2021

Judge: Batchelder 

Areas of Law: Labor & Employment Law

Local 2, representing carpenters and workers in related industries, is a local affiliate of IKORCC, which is an affiliated regional union of UBC. Barger has been a Local 2 member of Local 2. In 2007-2015, he worked intermittently as a carpenter for SPI, whose client owned and operated the Zimmer Power Station. Barger worked at Zimmer in 2014-2015. After being laid off, Barger called Zimmer’s Maintenance Manager, Lind, asking for a job. When Lind rejected Barger’s request, Barger responded that “[SPI is] stealing money from you” by falsifying hours. Barger told Meier, an IKORCC business agent, that he had told Lind about SPI’s overbilling. Barger said that it was worth the harm to other union members “to get even with” SPI. Meier filed a charge with IKORCC against Barger for violating the UBC Constitution by “Causing Dissension,” and failing to use “every honorable means to procure employment for Brother and Sister Members.” IKORCC fined Barger $5,000; UBC vacated the fine. Meanwhile, ESS hired Barger as an independent contractor. ESS assigned Barger to work at Zimmer. When he arrived, he was denied entry. ESS subsequently stopped offering him assignments. Barger sued, alleging violations of his free speech rights under the Labor-Management Reporting and Disclosure Act (LMRDA), 29 U.S.C. 411(a)(2). The district court granted the defendants summary judgment. The Sixth Circuit reversed in part. Barger’s speech is protected by LMRDA section 101(a)(2) under the form-content-context test; the content of Barger’s speech was of union concern. The defendants had not raised the right of a union to adapt and enforce reasonable rules.

Kentucky Retirement Systems v. Jefferson County Sheriff's Office

Docket: 2019-SC-0476-TG 

Opinion Date: June 17, 2021

Judge: John D. Minton, Jr. 

Areas of Law: Government & Administrative Law, Labor & Employment Law

In this administrative appeal brought by the Kentucky Retirement Systems from the decision of the circuit court in two consolidated cases concerning application of Ky. Rev. Stat. 61.598 the Supreme Court held that the Retirement Systems improperly applied the statute to pay spikes to a certain extent. Section 61-598, commonly known as the pension spiking statute, identifies artificial increases in creditable compensation to public pension-member employees occurring in the last five years preceding retirement, effectively increasing the employee's retirement benefits. In both cases, the alleged spikes were partly due to a change in the Jefferson County Sheriff's office (JCSO) accounting method and partly due to the employees' accrual of overtime hours. The Retirement Systems assessed JCSO for payment increased actuarial costs attributable to the alleged pension spikes. The circuit court reversed. The Supreme Court affirmed in part and reversed in part, holding (1) an isolated transition in JCSO's new accounting method did not amount to an increase in compensation; (2) the Retirement Systems properly assessed the increased actuarial costs to the extent it was caused by regular overtime work and was not the result of a bona fide promotion or career advancement; and (3) the circuit court erred in reversing the Retirement System's original assignment of the burden of proving a bona fide promotion.

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Commonwealth v. Hess

Dockets: 2019-SC-0130-DG, 2019-SC-0208-DG 

Opinion Date: June 17, 2021

Judge: Michelle M. Keller 

Areas of Law: Civil Procedure, Personal Injury

The Supreme Court vacated the judgment of the court of appeals vacating the order of the trial court denying Ford Motor Company's motion for summary judgment, holding that neither the court of appeals nor this Court had appellate jurisdiction of this unauthorized interlocutory appeal. Plaintiff sued Ford and multiple other defendants, alleging that Ford was one of the parties responsible for causing his malignant mesothelioma. Just over two years after the suit was filed, Ford moved for summary judgment. The trial court denied the motion in a one-sentence handwritten order that contained no analysis or reasoning. The merits panel of the court of appeals vacated the trial court's order and remanded for the trial court to enter another order with a basis for its determination. The Supreme Court vacated the judgment below and remanded to the trial court for further proceedings, holding that the interlocutory order in this case did not meet the requirements of the collateral order doctrine, and therefore, the court of appeals and this Court lacked jurisdiction to hear the appeal.

Louisville/Jefferson County Metro Government v. Honorable Olu A. Stevens

Docket: 2020-SC-0091-MR 

Opinion Date: June 17, 2021

Judge: Per Curiam 

Areas of Law: Civil Procedure

The Supreme Court granted motions to dismiss this appeal from the court of appeals' denial of a petition for a writ of mandamus directing Jefferson Circuit Court Judge Olu A. Stevens to rule on a summary judgment motion, holding that the appeal must be dismissed as moot. During the pendency of this appeal, Judge Stevens issued an order granting summary judgment to Louisville Metro Government (LMG) and dismissing with prejudice all claims against it on the grounds of sovereign immunity. The judge rejected the claim of governmental immunity asserted by the other defendant, Parking Authority of River City, Inc. (PARC), based on multiple issues of material fact leading to the denial of its request for summary judgment. PARC, however, was cleared to seek an immediate interlocutory appeal. The Supreme Court dismissed the appeal at hand, holding that because the request for a ruling on the summary judgment motion was issued, the need for a writ of mandamus no longer existed.

Jefferson County Sheriff's Office v. Kentucky Retirement Systems

Docket: 2019-SC-0315-DG 

Opinion Date: June 17, 2021

Judge: John D. Minton, Jr. 

Areas of Law: Government & Administrative Law, Labor & Employment Law

The Supreme Court reversed the judgment of the trial court upholding that decision of the Retirement Systems's Administrative Review Board affirming the decision of the Kentucky Retirement Systems applying the Ky. Rev. Stat. 61.598, the pension-spiking statute, to assess actuarial costs to the Jefferson County Sheriff's Office (JCSO), holding that the Retirement Systems did not properly apply the spiking statute in this case. The Kentucky Retirement Systems assessed the costs because it found a JCSO employee took unpaid leave for two months, causing a temporary decrease in gross compensation in that year, but then returned to his earlier pay. The circuit court agreement with the Retirement Systems, finding that section 61.598 as applied was not arbitrary, and therefore, the circuit court was bound by the Board's decision. The Supreme Court reversed, holding (1) the plain language of section 61.598 does not direct the retirement System to determine changes in compensation over a five-year period; and (2) the burden of proving a bona fide promotion was properly placed on the employer.

Davis v. Blendex Co.

Docket: 2020-SC-0171-WC 

Opinion Date: June 17, 2021

Judge: Lambert 

Areas of Law: Insurance Law, Labor & Employment Law, Personal Injury

The Supreme Court affirmed the decision of the court of appeals affirming the holding of the Workers' Compensation Board that the Administrative Law Judge properly found that Plaintiff's claim for workers' compensation benefits was barred by the applicable statute of limitations, holding that there was no error. Plaintiff received a workplace injury and filed a claim for benefits. Plaintiff never sought or received any temporary total disability benefits prior to the applicable statute of limitations expiring. The insurance adjuster for the employer's workers' compensation insurance carrier offered to settle Plaintiff's claim, but the parties never reached a settlement agreement. Plaintiff later filed an application for resolution of his claim, but the employer denied the claim on the grounds that it was time barred. The ALJ found that the claim was not timely under Ky. Rev. Stat. 342.185. The Board affirmed. The Supreme Court affirmed, holding that the ALJ properly determined that equitable principles did not warrant the tolling of the statute of limitations.

Davis v. Progressive Direct Insurance Co.

Docket: 2020-SC-0168-DG 

Opinion Date: June 17, 2021

Judge: Vanmeter 

Areas of Law: Insurance Law, Personal Injury

The Supreme Court affirmed the ruling of the court of appeals excluding from the definition of a "motor vehicle" or "trailer" a horse-drawn wagon for insurance coverage purposes, holding that the insurance policy was unambiguous and did not violate Plaintiff's reasonable expectations when she purchased her motorcycle coverage. While driving her motorcycle, Plaintiff encountered a horse-drawn buggy. The horse became spooked and jumped into oncoming traffic, gravely injuring Plaintiff when she collided with the horse. Plaintiff's motorcycle was insured by Progressive, and neither the driver of the buggy nor his father carried any form of insurance. Progressive denied Plaintiff's claim under the uninsured motorist provision of her motorcycle coverage on the grounds that a horse-drawn wagon was not covered under the policy. The circuit court granted Progressive's motion for summary judgment. The court of appeals affirmed, concluding that the horse-drawn wagon did not qualify as a "motor vehicle" or "trailer of any type" under the policy terms. The Supreme Court affirmed, holding that Plaintiff's assertions on appeal were unsupported.

Benalcazar v. Genoa Township

Dockets: 20-4044, 20-3995 

Opinion Date: June 10, 2021

Judge: Jeffrey S. Sutton 

Areas of Law: Civil Procedure, Real Estate & Property Law, Zoning, Planning & Land Use

The Benalcazars purchased 43 acres in Genoa Township in 2001. The property sits at the northern end of the Township’s more developed areas and abuts the Hoover Reservoir. The parcel was zoned as Rural Residential; development would have required separate septic systems, clear-cutting, and multiple driveways. In 2018, the Benalcazars obtained rezoning of the property to a Planned Residential District, which permits higher density development. Township residents approved a referendum that prevented the amendment from taking effect, O.R.C. 519.12(H). The Benalcazars sued. In a settlement, the Township agreed to change the zoning designation; the Benalcazars agreed to reduce the proposed development from 64 homes to 56 homes, to provide more open space, and to increase the width of some lots. O.R.C. 505.07 provides “Notwithstanding . . . any vote of the electors on a petition for zoning referendum … a township may settle any court action by a consent decree or court-approved settlement agreement which may include an agreement to rezone.” The district court permitted objectors to intervene, dismissed the Benalcazars’ due process claims, but ruled that the Benalcazars stated a plausible equal protection claim, and approved the consent decree. The Sixth Circuit affirmed. The Benalcazars’ due process and equal protection claims are not “frivolous” but “arguable.” The district court had subject-matter jurisdiction and had the authority to approve a settlement. No other merits inquiry was required.

Vitolo v. Guzman

Dockets: 21-5517, 21-5528 

Opinion Date: May 27, 2021

Judge: Thapar 

Areas of Law: Business Law, Civil Rights, Government & Administrative Law, Public Benefits

The American Rescue Plan Act of 2021 allocated $29 billion for grants to help restaurant owners. The Small Business Administration (SBA) processed applications and distributed funds on a first-come, first-served basis. During the first 21 days, it gave grants only to priority applicants--restaurants at least 51% owned and controlled by women, veterans, or the “socially and economically disadvantaged,” defined by reference to the Small Business Act, which refers to those who have been “subjected to racial or ethnic prejudice” or “cultural bias” based solely on immutable characteristics, 15 U.S.C. 637(a)(5). A person is considered “economically disadvantaged” if he is socially disadvantaged and he faces “diminished capital and credit opportunities” compared to non-socially disadvantaged people who operate in the same industry. Under a pre-pandemic regulation, the SBA presumes certain applicants are socially disadvantaged including: “Black Americans,” “Hispanic Americans,” “Asian Pacific Americans,” “Native Americans,” and “Subcontinent Asian Americans.” After reviewing evidence, the SBA will consider an applicant a victim of “individual social disadvantage” based on specific findings. Vitolo (white) and his wife (Hispanic) own a restaurant and submitted an application. Vitolo sued, seeking a preliminary injunction to prohibit the government from disbursing grants based on race or sex. The Sixth Circuit ordered the government to fund the plaintiffs’ application, if approved, before all later-filed applications, without regard to processing time or the applicants’ race or sex. The government failed to provide an exceedingly persuasive justification that would allow the classification to stand. The government may continue the preference for veteran-owned restaurants.

Carhartt, Inc. v. Innovative Textiles, Inc.

Docket: 20-1826 

Opinion Date: May 27, 2021

Judge: McKEAGUE 

Areas of Law: Business Law, Commercial Law, Contracts

In 2009, Carhartt contracted with Innovative to create a flame-resistant fleece fabric for use in its line of flame-resistant garments. The fabric that Innovative developed for Carhartt, “Style 2015," contained a modacrylic fiber, “Protex-C.” Innovative agreed that it would conduct flame-resistance testing on the Style 2015 fabric before shipping it to Carhartt, using the industry-standard test, ASTM D6413. Carhartt sent Innovative emails in 2008, 2010, 2011, 2012, and 2013 stating that Carhartt would do “regular, random testing on the product that is received.” Carhartt performed visual inspections but did not conduct flame-resistance testing until 2016. The Style 2015 fabric failed the D6413 test. Carhartt notified Innovative, which then conducted its own testing and concluded that Style 2015 fabrics dating back to 2014 did not pass flame-resistance testing. In 2013, Innovative stopped using Protex-C and began using a different modacrylic fiber without notice to Carhartt. The district court granted Innovative summary judgment on Carhartt’s negligence, fraud, misrepresentation, false advertising claims. breach of contract and warranty claims. The court reasoned that Carhartt did not notify Innovative of the suspected breach within a reasonable amount of time after Carhartt should have discovered the defect, as required by Michigan’s Uniform Commercial Code. The Sixth Circuit reversed. Reasonable minds could differ as to whether Carhartt should have discovered the breach sooner by performing regular, destructive fire-resistance testing on the fabric.

Jackson v. Genesee County Road Commission

Docket: 20-1334 

Opinion Date: May 27, 2021

Judge: Gibbons 

Areas of Law: Civil Rights, Labor & Employment Law

Jackson, an African American woman, was GCRC's Human Resources Director. Daly, GCRC’s chief administrative officer, was Jackson’s supervisor. There were pending internal discrimination complaints when Jackson started, including a complaint by African American employees about Bennett. Jackson ultimately negotiated a severance agreement with Bennett. A second issue involved McClane’s complaints about Williams, GCRC’s finance director, who subsequently resigned. Jackson was also responsible for approving Equal Employment Opportunity Plans submitted by vendors and contractors. Jackson realized that several vendors’ EEOPs had expired and became concerned that some GCRC directors were conducting business with vendors before their EEOPs were approved. Jackson implemented several changes in GCRC’s EEOP approval process. Several employees, vendors, board members, and union representatives complained to Daly about Jackson’s “abrasiveness” and communication style. Other employees reported having good experiences with Jackson. Daly fired Jackson without giving a reason other than she was an at-will employee. Jackson filed a retaliation claim under Title VII of the Civil Rights Act and Michigan’s Elliot-Larsen Civil Rights Act. The district court granted GCRC summary judgment. The Sixth Circuit reversed. Jackson engaged in protected activity and there remains a genuine factual dispute as to causation. Jackson’s actions could reasonably be viewed as steps to ensure there was no discrimination in hiring both within GCRC and among its vendors, and were protected activity under Title VII. A reasonable juror could find that Jackson has established a prima facie case of causation through circumstantial evidence including the temporal proximity between Jackson’s protected activity and termination.

Baker v. Iron Workers Local 25

Docket: 20-1946 

Opinion Date: May 28, 2021

Judge: Jeffrey S. Sutton 

Areas of Law: Arbitration & Mediation, Civil Procedure, ERISA, Labor & Employment Law

The Labor Management Relations Act forbids employers from directly giving money to unions, 29 U.S.C. 186(a); an exception allows an employer and a union to operate a trust fund for the benefit of employees. Section 186(c)(5)(B) requires the trust agreement to provide that an arbitrator will resolve any “deadlock on the administration of such fund.” Several construction companies and one union established a trust fund to subsidize employee vacations. Six trustees oversaw the fund, which is a tax-exempt entity under ERISA 26 U.S.C. 501(c)(9). A disagreement arose over whether the trust needed to amend a tax return. Three trustees, those selected by the companies, filed suit, seeking authority to amend the tax return. The three union-appointed trustees intervened, arguing that the dispute belongs in arbitration. The court agreed and dismissed the complaint. The Sixth Circuit affirmed. While ERISA plan participants or beneficiaries may sue for a breach of statutory fiduciary duty in federal court without exhausting internal remedial procedures, this complaint did not allege a breach of fiduciary duties but rather alleges that the employer trustees’ own fiduciary duties compelled them to file the action to maintain the trust’s compliance with tax laws. These claims were “not directly adversarial to the [union trustees] or to the Fund.”

Garland v. Orlans, PC

Docket: 20-1527 

Opinion Date: May 28, 2021

Judge: Nalbandian 

Areas of Law: Civil Procedure, Consumer Law, Legal Ethics

The Orlans law firm, sent a letter on law-firm letterhead, stating that Wells Fargo had referred the Garland loan to Orlans for foreclosure but that “[w]hile the foreclosure process ha[d] begun,” “foreclosure prevention alternatives” might still be available if Garland contacted Wells Fargo. The letter explained how to contact Wells Fargo “to attempt to be reviewed for possible alternatives,” the signature was typed and said, “Orlans PC.” Garland says that the letter confused him because he was unsure if it was from an attorney and “raised [his] anxiety” by suggesting “that an attorney may have conducted an independent investigation and substantive legal review ... such that his prospects for avoiding foreclosure were diminished.” Garland alleges that Orlans sent a form of this letter to thousands of homeowners, without a meaningful review of the homeowners’ foreclosure files, so the communications deceptively implied they were from an attorney. The Fair Debt Collection Practices Act (FDCPA) prohibits misleading debt-collection communications that falsely imply they are from an attorney. The Sixth Circuit affirmed the dismissal of the purported class action for lack of jurisdiction. Garland lacks standing. That a statute purports to create a cause of action does not alone create standing. A plaintiff asserting a procedural claim must have suffered a concrete injury; bare allegations of confusion and anxiety do not qualify. Whether from an attorney or not, the letter said nothing implying Garland’s chance of avoiding foreclosure was “diminished.”

Wyatt v. Nissan North America, Inc.

Docket: 20-5021 

Opinion Date: May 28, 2021

Judge: Karen Nelson Moore 

Areas of Law: Labor & Employment Law

Wyatt began working as a Nissan project manager in 2013. For two years she received positive annual performance reviews. During those years, Wyatt twice had medical leave. Nissan restored Wyatt to her position and granted nearly all the work accommodations recommended by Wyatt’s doctor. In 2015, Wyatt began working on a project headed by Mullen who sexually harassed and assaulted her. Wyatt’s complaints led to Mullen leaving the company. At the same time, Wyatt took medical leave for back surgery. Upon her return, she and her doctors requested workplace accommodations, similar to those she had previously requested. Nissan denied her request for a 40-hour workweek. Wyatt claims that managers harassed her about her requests and gave Wyatt her first “below expectations” annual evaluation, Wyatt filed a charge of discrimination with the EEOC. Her managers later issued Wyatt a Performance Improvement Plan. Wyatt refused to sign the PIP, believing that it was retaliatory. In February 2017, Wyatt took medical leave and continues to be on leave. Wyatt filed suit, alleging hostile work environment, Title VII, 42 U.S.C. 2000e; failure-to-accommodate, Americans with Disabilities Act, 42 U.S.C. 12101l and retaliation claims under Title VII, the ADA, and the Family and Medical Leave Act, 29 U.S.C. 2601. The district court granted Nissan summary judgment. The Sixth Circuit affirmed with respect to Wyatt’s ADA discrimination claim and claims that were based on retaliatory harassment but reversed with respect to Wyatt’s hostile work environment and retaliation claims based on adverse employment actions.